The Secondary Market that is Propping up Retail

Posted Ноября 29, 2017

You’d have to have been hidden under a rock not to have heard about how e-commerce has been taking business away from brick-and-mortar stores in recent years. However, it isn’t necessarily all doom and gloom. There is a hope yet for retail, coming from an unexpected place: the act of returning goods we have had second thoughts over has given rise to a secondary market in the U.S. The rapid growth of that market has close ties to e-commerce.

Scary stats

Let’s begin by getting those scary statistics out of the way. E-commerce’s share of quarterly retails sales has increased year after year since the turn of the millennium, according to data from Census Bureau. In the third quarter of 2,000, $7.3bn was generated by e-commerce, just 1 per cent of retail sales in that quarter. However, that number in the same quarter in 2010 had increased to $43.5bn, 4.6 per cent of quarterly retail sales (adjusted). In the third quarter of 2017, that number stood at £115.3bn : 9.1 per cent of retail sales.

The power of e-commerce is especially evident on major U.S. shopping days such as Black Friday. Last year saw e-commerce generate $3.34bn in Black Friday sales, the first say to generate more than $1bn in Internet sales from mobile devices, according to data from Adobe Digital Insights. The sales came from approximately 18 billion visits to online retail websites.

Retail isn’t dead, it just looks different

There have been many cases where industries have almost entirely moved away from brick and mortar stores and found their home online. Movie rentals, of course, is one of the more better-known examples. Blockbuster video paid for failing to move with the times and now on-demand services such as Netflix are among the big players in watching movies at home.

The same can be said for casinos, with sites such as Vegas Casino not only having had to replace a brick and mortar business, but also recreate the experience that an offline casino provides through offering a number of variants and high-tech games such as live casino games.  Many who enjoyed frequenting casinos continue to flock to their offline counterpart. Vegas Casino is an example of why this is the case. The site understood that security is a key factor for its users and so offered Bitcoin as a means of payment. The cryptocurrency is the safest currency online today, ensuring that user data remains 100% safe.

Few are gambling on offline retail these days. However, it isn’t ready to go away just yet.

Fleamarkets are saving retail


A lesser-known fact about e-commerce is that it makes a significant contribution to the secondary market- a second retail wave that occurs when goods sold in such stores as Walmart and Macy’s are returned or unwanted. Secondary players in this market include salvage and wholesale dealers, dollar stores, outlet stores and fleamarkets.

With regards to e-commerce, 8-10 per cent of all goods purchased in the U.S. are returned. When it comes to online sales, however, that number rises dramatically to 25-40 per cent.


This matters because, even though the retail industry has been hit by ongoing store closures and bankruptcies, the secondary market has seen dramatic growth.

Secondary market booming

In fact, the secondary market ranks as among the fastest-growing segments in the U.S. economy, rising from $310bn in 2008 to $554bn in 2016.

The main thing to take away from this is that with so much negativity surrounding retails, it is a fact that there is a growing retail market out there, even if it’s one that still requires the Internet.